Firm Size, Technical Efficiency and Productivity Growth in Chinese Industry

Cheng, Yuk-Shing; Lo, Dic

Abstract

Since the mid-1990s, China’s state leadership has adopted a policy of nurturing the competitiveness of large state-owned industrial enterprises. The implications of this policy have been a matter of debate in the literature. This paper seeks to provide some useful input into the debate. With a view of investigating into the potential of long-term development of large enterprises, we estimate the “sequential production technology” in computing the Malmquist productivity index for various size-groups of enterprises in Chinese industry. Our findings indicate that large enterprises did register the fastest productivity growth and improvement in technical efficiency in the 1994-97 period. It thus appears that large-scale, mainly state-owned Chinese enterprises have exhibited the potential of making noticeable improvements and the relevant state policy does have its justification.

Citation

Cheng, Y.-S., & Lo, D. Firm Size, Technical Efficiency and Productivity Growth in Chinese Industry. London

• Working Paper Type: Working Paper
• Deposit Date: Mar 16, 2006
• Publicly Available Date: Jan 21, 2025
• Pages: 1-33
• Series ISSN: 17535816
• Keywords: firm size, technical efficiency, productivity, China, industry
• Publisher URL: https://www.soas.ac.uk/sites/default/files/2022-10/economics-wp144.pdf